Discussion:Estate beneficiaries and stock distribution

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Discussion Forum Index --> Advanced Tax Questions --> Estate beneficiaries and stock distribution


Discussion Forum Index --> Tax Questions --> Estate beneficiaries and stock distribution

Chris2lane (talk|edits) said:

May 1, 2014
I've got an estate with 4 beneficiaries. Three of the bennys took distribution of stock "in kind" while the other asked that her shares of the stock to be sold. Please correct me if I'm wrong, but I do not think that there is a tax consequence for transfers of stock "in kind". My concern is how to reflect the capital gains on the sale of stock to the 1 benny without having the other 3 or the estate be responsible for it? Capital gains don't pass onto the K-1, rather they stay within the estate.

Kevinh5 (talk|edits) said:

1 May 2014
The executor could elect to treat the stock as sold at the FMV as of date of distribution. You had better look up whether that applies to all distributions made during the year, though, if that matters in your case.

Alternatively, you might consider whether the separate share rule might be applied so as to allocate the gain correctly.

Frankly (talk|edits) said:

1 May 2014
Did the estate sell the stock and distribute the proceeds, or was the stock distributed and the beneficiary then sold it?

You might post this question at www.taxprotalk.com as that is where most of the active TA members have migrated given the impending shutdown of this site.

Chris2lane (talk|edits) said:

May 2, 2014
The estate sold the stock and then distributed the funds to the beneficiary.

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